Biden Budget Takes Aim at Crypto Wash Trading

Proposed changes on tax rules aroun cryptoasset wash trading could raise up to $24 billion, according to the Biden administration

article-image

Source: Shutterstock / lev radin, modified by Blockworks

share

President Joe Biden’s 2024 Fiscal Year budget will propose tax changes on cryptoasset transactions to eliminate wash trading.

As cryptoassets are not classified as securities, existing cryptocurrency traders are able to claim tax-deductible losses on failed cryptoasset losses and allow them to buy back into the same investments. 

Congress has previously considered changing the status of cryptoassets, but any bill is far from passage in the divided legislature.

This latest change in tax requirements for cryptocurrencies is expected to raise $24 billion for the Treasury, according to the Wall Street Journal.

In addition to applying the same rules to crypto traders as investors in the stock market — the Biden administration is also planning to increase tax rates for America’s wealthiest 0.01% to a minimum of 25%.

Individuals making more than $400,000 a year would see an increase in their taxes from 37% to 39.6% and corporations would see their taxes go up from 21% to 28%.

Currently, cryptocurrencies are considered a digital asset and according to the Internal Revenue Service (IRS) are taxable if they generate a gain or loss, including but not limited to:

  • Sales for fiat currency
  • Exchange for goods and services 
  • Airdrops 
  • Minting and staking activities

The budget is expected to be released today, but will need to be approved by the House of Representatives and the Senate before receiving final sign-off from the President.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

recent research

dydx unlimited.png

Research

dYdX Unlimited is a revamp to the protocol's design and tokenomics.

article-image

As projects like BitVM innovate, Bitcoin builders call for transparency over misleading buzzwords

article-image

USD-denominated floor prices for both NFT collections have now gone more than 20x since December 2022

article-image

Keep an eye on liquidity into the holidays, Kraken’s Thomas Perfumo says

article-image

A Solana researcher identified that the network’s top sandwich bot was pocketing millions of dollars a day from sandwich attacks

article-image

A strategic currency devaluation does have some historical precedent in China

article-image

Bitwise execs predicted Tuesday that bitcoin ETFs will attract more flows next year than they did in 2024